CHENNAI, India -- Five public sector banks -- Bank of India, Indian Bank, Syndicate Bank, United Bank of India and Punjab National Bank -- are linking their ATMs and pooling their information technology (IT) resources to offer a shared ATM network, according to a report in The Hindu.
Four of them signed a memorandum of understanding for linking their ATMs on April 9, and Punjab National Bank is expected to sign off soon.
The proposed network is likely to be christened "B5" or "Bank 5," according to the Hindu report. The Chennai-based India Switch Company (P) Ltd. will be the network service provider. Bank of India will manage the settlement system of the shared ATM network.
D. Krishnamurthy, Bank of India's general manager of IT resources, Bank of India, told the Hindu that the new network would become operational from May 1. Customers of the five banks are expected to get free access to the shared ATM network initially. He said they might be charged a fee of not more than 5 rupees (about 11 cents U.S.) per transaction later on. Customers are currently charged 25 rupees (about 52 cents U.S.) per transaction for using the Swadhan shared ATM network.
Krishnamurthy said the network sharing would reduce the need for individual banks to make heavy capital investments in ATMs. He said he expects more nationalized banks to join the proposed network. The move will also advance the use of debit cards for point-of-sale transactions, he said.
The ATM network sharing initiative of the five banks comes even as the Indian Banks Association's Swadhan network is being disbanded. (See related story India's Swadhan network to end ATM sharing in '04)
